‘BTC’s volatility has reached low levels not seen since 2017’

A recent report published in ‘The Bitcoin Monthly’ by Ark Invest, an American asset management firm led by Cathie Wood, revealed that Bitcoin’s 90-day price volatility index has reached its lowest level since 2017. Volatility could potentially lead to significant price fluctuations in the near future. The report also highlighted the Profit and Loss (PnL) index of short-term Bitcoin (BTC) holders, which remains close to 1. This shows that many investors are currently hovering near breakeven points, suggesting that speculative behavior is common among end market participants. Historically, similar indicators have coincided with trend reversals and rebounds after short-term corrections during bullish market cycles.

Also, Ark Invest’s report for the previous month highlights the growing interest of institutional investors in BTC, especially after the BlackRock spot Bitcoin Exchange Traded Fund (ETF) went public. The increase in OTC Bitcoin (BTC) balances, which often act as a proxy for corporate activity, further supports the idea of increased institutional participation in cryptocurrency.

The combination of reduced volatility and increased institutional interest opens up interesting possibilities for the cryptocurrency market. While the current low volatility may provide some respite to existing investors, it also signals a potential escalation of momentum and tension, indicating possible significant price action in the future.

As institutional investors continue to explore the potential of Bitcoin (BTC) as an asset class, market holdings could potentially bring more stability in the long run. With the involvement of more important financial institutions, the market may experience a new sense of credibility and legitimacy, potentially mitigating the extreme price fluctuations that have marked Bitcoin’s history.